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CIRCULAR No

CIRCULAR No. 11/2000/TT-NHNN14 OF OCTOBER 13, 2000 GUIDING THE DEBT RESCHEDULE AND FREEZING AS WELL AS THE PROVISION OF NEW LOANS IN ORDER TO RESTORE PRODUCTION, STABILIZE THE PEOPLE�S LIFE IN THE FLOOD-STRICKEN AREAS IN MEKONG RIVER DELTA ACCORDING TO THE GOVERNMENT�S RESOLUTION No. 15/2000/NQ-CP OF OCTOBER 6, 2000

In furtherance of the Prime Minister�s direction and the Government�s Resolution No. 15/2000/NQ-CP of October 6, 2000 on a number of measures to further overcome flood consequences, quickly stabilize the people�s life and promptly settle newly-arising problems, in order to ensure the requirements for fast and sustainable socio-economic development in the Mekong River delta, the State Bank Governor requests the general directors (directors) of credit institutions, and directors of the State Bank�s branches in Mekong River delta provinces to implement the followings:

1. HANDLING OF DEBTS BORROWED FROM BANKS AND LOST DUE TO FLOODS

The general directors (directors) of credit institutions shall direct their attached branches in Mekong River delta to revise all debts borrowed from banks by households which have suffered from losses caused by floods, then consider for appropriate handling measures; concretely as follows:

1.1. On debt extension (debt reschedule):

- For households owing debts to credit institutions, having suffered from losses caused by floods and being unable to repay debts according to the credit contracts, if they file an application requesting debt reschedule, the credit institutions shall consider for debt reschedule in accordance with current regulations of the State Bank Governor.

- In cases where households� debts had been rescheduled before they suffered from losses caused by floods, if they are still unable to repay their due debts, the credit institutions shall consider for debt reschedule for a further production/business cycle, for short-term loans, or a period equal to a half of the term, for medium- or long-term loans.

1.2. Compilation of debt freezing-requesting dossiers:

- For debts borrowed from credit institutions by households, that have suffered from losses caused by floods with the extent of loss reaching 30% or higher, if the borrowers really meet with difficulties in repaying debts, the credit institutions shall compile a dossier requesting debts freezing, the maximum duration for a debt freezing shall not exceed 5 years.

A debt freezing-requesting dossier shall include:

+ The debt-freezing application of the capital-borrowing household;

+ A copy of the capital-borrowing contract or loan debt-acknowledging papers. For State commercial banks or Development and Investment banks, such papers shall be compiled by the bank�s branches.

+ A written certification of losses caused by floods to the borrowers, clearly stating the level and amount of damaged capital with certification of the commune-level People�s Committees and the lending banks at the time when losses incur.

+ Plan for debt repayment after the expiry of debt freezing period.

- On the basis of the detailed table on debt capital lost due to floods in 2000 proposed for freezing with full certifications by their branches, the lending credit institutions shall make synthesized tables on debt capital lost due to floods in 2000 proposed for freezing.

- The lending banks shall gather all debt freezing-requesting dossiers in separate systems and send the synthesized tables on debt capital lost due to floods in 2000 proposed for freezing to the State Bank (the Credit Department) before December 31, 2000, so that the State Bank shall coordinate with the Ministry of Finance in summing-up and submitting them to the Prime Minister for consideration and decision. Particularly for the people�s credit funds and rural joint-stock commercial banks in localities, the State Bank�s provincial branches shall sum up and report them to the Vietnam State Bank.

- During the time of compilation of debt freezing-requesting dossiers, credit institutions shall temporarily refrain from collecting interests.

2. PROVISION OF LOANS FOR THE PURCHASE OF PADDY AND RICE IN AVOIDANCE OF FLOODS:

2.1. The State commercial banks shall mobilize enough capital to provide as loans to the Southern Food Corporation for the purchase of paddy and rice in avoidance of floods in Mekong River delta provinces. The amount of food which the Prime Minister directs the Southern Food Corporation to buy is 400 thousand tons (in paddy equivalent), in which: Long An province: 100 thousand tons, Dong Thap: 100 thousand tons, An Giang: 100 thousand tons, and other provinces: 100 thousand tons; such purchase shall last from September 25, 2000 to December 31, 2000. The State commercial banks shall provide loans at the current interest rates, in order to ensure the purchase of the above-said food amount.

2.2. The lending banks shall create all favorable conditions for the Southern Food Corporation to borrow capital, in necessary cases, they shall coordinate with one another in jointly providing loans at the request of the enterprises.

3. PROVISION OF NEW LOANS FOR HOUSEHOLDS

3.1. In order to help households to obtain capital for production in the winter-spring crop, credit institutions shall have to ensure the mobilization of sufficient capital sources, to fully meet flood-stricken households� capital requirements for restoration of production. Credit institutions shall provide loans in accordance with the current regulations of the State Bank Governor.

3.2. Attention must be paid to the provision of loans for the purchase of crop varieties, fertilizers, insecticides, as well as for other costs in direct service of production.

3.3. In cases where the State-run credit institutions provide loans to meet the demands stated in Points 2 and 3 of this Circular but meet with difficulties in capital sources, they shall report such to the State Bank Governor for consideration and settlement.

4. IMPLEMENTATION ORGANIZATION

4.1. For the State Bank:

- The functional departments of the State Bank shall, within the ambit of their assigned functions and tasks, closely supervise and promptly settle the arising issues proposed by the State Bank�s branches and credit institutions.

- The State Bank�s branches in Mekong River delta provinces shall coordinate with and direct credit institutions in their respective localities in correctly implementing the guiding documents of the Government and the State Bank. Monthly, they shall organize briefings with credit institutions in the localities in order to grasp thoroughly the situation, and work out measures to direct and settle problems falling under the scope of their functions. At the same time, on the 5th every month, they shall synthesize and report to the Vietnam State Bank the results of the performance of tasks by credit institutions in the localities.

4.2. For credit institutions:

- Credit institutions shall, based on the provisions of this Circular, provide detailed guidance in order to soon organize the implementation thereof.

- Periodically on the 5th every month, credit institutions shall sum up and send reports on the results of the provision of loans for the purchase of paddy and rice in avoidance of floods as well as for production restoration in the flood-stricken areas in the previous month to the Vietnam State Bank (the Credit Department).

4.3. This Circular takes effect after its signing.

For the State Bank Governor

Deputy Governor
NGUYEN VAN GIAU